Correlation Between Citic Guoan and Zhongtong Guomai
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By analyzing existing cross correlation between Citic Guoan Wine and Zhongtong Guomai Communication, you can compare the effects of market volatilities on Citic Guoan and Zhongtong Guomai and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Citic Guoan with a short position of Zhongtong Guomai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and Zhongtong Guomai.
Diversification Opportunities for Citic Guoan and Zhongtong Guomai
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citic and Zhongtong is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine and Zhongtong Guomai Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtong Guomai Com and Citic Guoan is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Citic Guoan Wine are associated (or correlated) with Zhongtong Guomai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtong Guomai Com has no effect on the direction of Citic Guoan i.e., Citic Guoan and Zhongtong Guomai go up and down completely randomly.
Pair Corralation between Citic Guoan and Zhongtong Guomai
Assuming the 90 days trading horizon Citic Guoan is expected to generate 4.35 times less return on investment than Zhongtong Guomai. But when comparing it to its historical volatility, Citic Guoan Wine is 1.13 times less risky than Zhongtong Guomai. It trades about 0.05 of its potential returns per unit of risk. Zhongtong Guomai Communication is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 465.00 in Zhongtong Guomai Communication on September 1, 2024 and sell it today you would earn a total of 656.00 from holding Zhongtong Guomai Communication or generate 141.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Guoan Wine vs. Zhongtong Guomai Communication
Performance |
| Timeline |
| Citic Guoan Wine |
| Zhongtong Guomai Com |
Citic Guoan and Zhongtong Guomai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Guoan and Zhongtong Guomai
The main advantage of trading using opposite Citic Guoan and Zhongtong Guomai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan position performs unexpectedly, Zhongtong Guomai can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Zhongtong Guomai will offset losses from the drop in Zhongtong Guomai's long position.| Citic Guoan vs. Xinjiang Baodi Mining | Citic Guoan vs. Minmetals Capital Co | Citic Guoan vs. Lutian Machinery Co | Citic Guoan vs. Shanghai Rightongene Biotechnology |
| Zhongtong Guomai vs. Chengdu B ray Media | Zhongtong Guomai vs. Mango Excellent Media | Zhongtong Guomai vs. Focus Media Information | Zhongtong Guomai vs. JiShi Media Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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